Technocratic management, no matter how brilliant, cannot unwind structural inequalities.
Over the last 10 years, government has relied increasingly on consultants from Bain, BcG, PWC, Deloitte and McKinsey. Given that they often don't have any relevant specific skills or experience in the sectors that they consult on, this is a key risk and potentially a reason behind the government crisis in the UK and elsewhere.
‘’The big wake-up call was Brexit [preparations, strategy, communications, governance, stakeholder leadership, execution] etc, because the consultants were everywhere. The avg PWC Partner raked in £1m in bonuses last year. But yet the country is a train crash.
In 2019-20, the British government spent nearly £1bn on strategy and other consultants which carry out chunks of the state’s core functions. These firms also work in other markets and have been accused of various ethics/ corruption charges. ‘’
In 2008, following the last crash, the UK market was flooded with strategy consultants, but with little to no business or even sector expertise. 27 year old MBA's straight out of Harvard. This created an opportunity for boutique startups. We built FIFTH P Strategy Consulting and brought in people with skin-in-the-game experience. Bright, inspired individuals with a diverse blend of analytical (left brain) and creative (right brain) skills and knowledge of the consumer, retail, supply chain, economics, unit economics, brands, categories, growth and innovation. Retail is highly specialised. As strategy consultants to the world's largest and most successful corporations, our USP and defensIbility was rooted in subject matter expertise with real use cases, gained working with and for some of the best multinationals on the planet. Rising unrest and food security threats demand that we place intentional bets into this sector to ensure we enable knowledge transfer to build on the R&D and best practices from the last 20 years. (For adaptability/ resilience)
Over the last 10 years however, the fragility that used to exist in a client company (e.g. lost synergies or agility due to heavily silo'd ways of working, poor knowledge/ IP transfer) has now been outsourced (risk) to consulting firms where often, as in the case of PWC in the UK, big decisions on issues such as Brexit are left to what Simon Kuper calls the CHUMS and their Uxbridge and Eton mates at PWC, neither of which have any real knowledge of Just-in-time, economics, growth, and business at P&l level. The consulting market in the US/ UK/ Europe has been flooded by recent 'over-hiring' practices following huge injections by cash-rich firms (BcG was named specifically in a recent chat with a European CEO).
If this is how you outsource your strategy and execution capability, you might want to rethink how you build long term defensability for sustained growth in the future.
Comments